I was recently chatting to fellow baby boomers at a family get-together. We hadn’t met since we were teenagers so there were partners, pets and grown up children which makes you realise how fast time flies. I was reminiscing about the “good old days” of 20% inflation, the 3 day week, 15% interest rates and the ever-present threat of nuclear annihilation and then I (foolishly) blurted out that today’s youngsters have never had it so good!
Foolishly because Louise, one of cousin’s grown-up children, who is attending law school studying economics, seized the opportunity to explain (I’m recalling and paraphrasing this bit) “the genuine economic predicament of Millennials and how a combination of student debt, unemployment, global proliferation, EU migration and rising house values is reducing the salaries and outlook of masses of the UK’s younger generation, causing an unparalleled disparity of wealth between the generations”.
Instead of heading off to the bar to regroup with a stiff drink, I heard myself asking “Why?” and off she went again (I’m attempting to paraphrase again) “Millennials are paying the price for the UK’s most spectacular bookkeeping catastrophe to date – bigger than the Bank bailout after the Credit Crunch. Back in the 1950’s and 1960’s, nobody predicted we would live as long as we do today in such large numbers. The OAP pensions promised in the past, including Government State Pension and Company Final Salary Schemes, which seemed reasonable in times when most people died within a few years of retirement, are now crippling the Millennials of today and will do so for years to come.”
Baby Boomers & the 90s Property Boom
Moving back onto safer ground (for me) she finished with “Baby boomers (born between 1945 and 1965) have benefited from the vast rises in house prices since the 1970s, have over-generous pensions, which means their wealth has grown exponentially through no skill of their own.”
Certainly the disparity of wealth between the older and younger generations could have unparalleled consequences for the living standards of younger Millennials so Houston / Colchester – Do We Have A Problem?
As regular Colchester Property Blog readers will know I do like a challenge. Louise made a good case that her “generation rent” appears to have been hard done by but there are always two sides to every story so I’ve been doing some homework.
Since 1990 the average value of a property in Colchester has risen from £83,400 to its current level of £312,800. With a total of 26,218 homeowners aged over 50 in Colchester that works out at a £6.01 billion windfall for Colchester homeowners fortunate enough to own their own homes during the property boom of the 1990s and early 2000’s.
There’s no doubt the growth in property values in the 1990’s and 2000’s helped many Colchester baby boomers and blows the perceived wisdom that each generation gets wealthier than the previous one out of the water because the figures do back up Louise’s contention that Millennials are being priced out of home ownership.
But (and there’s always a but) next week I shall put the case in defence of Baby Boomers. In the meantime please share your thoughts. Are you a Millennial or a Baby Boomer? Do you feel lucky or guilty or hard done by? Add your comments below or email firstname.lastname@example.org. Alternatively give me ring on 01206 862288 to discuss any aspect of the Colchester property market.